Question 6: Merger NPV (RWJJ Q15, p. 850) Harrods PLC has a market value of $600 million and 30 million shares outstanding. Selfridge Department Store has a market value of $200 million and 20 million shares outstanding. Harrods is contemplating acquiring Selfridge. Harrod's CFO concludes that the combined firm with synergy will be worth $1 billion, and Selfridge can be acquired at a premium of $100 million. (a) If Harrods offers 15 million shares of its stock in exchange for the 20 million shares of Selfridge, what will the stock price of Harrods be after the acquisition? (b) What exchange ratio between the two stocks would make the value of the stock offer equivalent to a cash offer of $280 million